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Insight, news and updates from Alliott NZ Chartered Accountants, Auckland New Zealand. The views expressed here are the views of the author and should be discussed in further detail should an article be relevant to your individual circumstances.

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2016 New Zealand tax planning tips

Written by Anthony McIlroy on February 19th, 2016.      0 comments

If you fail to plan, you are planning to fail!

check tick-277 Benjamin Franklin was spot on so, bearing his famous words in mind, we outline the key items to think about pre and post-31 March. If you own or operate a business, consider the following points:

Financial year-end tax planning check list

Actions prior to 31 March

Asset purchases

Consider the purchase of essential, low value assets prior to 31 March. All assets costing under $500 (ex GST) may be claimed as an expense in the year of purchase.

Bad debts

Review your debtors ledger. Amounts owing that you believe will not be collected MUST BE written off in your debtors ledger prior to 31 March in order to claim a deduction for bad debts. If you are unsure how to do this please contact us.

Pre-paying certain expenses

The rules surrounding prepayments are varied, there at section 5 of the following link is a table of types of expenditure that can be prepaid whilst still claiming a full deduction even though you may not use those resources until the following year.

Repairs and maintenance

Consider undertaking any necessary repairs and maintenance on assets prior to the end of the financial year. But bear in mind that improving an asset has a different tax treatment and may result in a full deduction. If you are unsure how this might apply to your scenario please talk to us.

Review last year’s fixed asset register

The book value of assets can be written off for taxation purposes if the asset is no longer in use by the business and the business has no intention of using the assets in the future.

New financial year tax year planning check list

Many business owners dread this time of year for collating and organising their tax records. If that’s you, consider making a new financial year’s resolution to simplify the coming tax year with just two steps:

Step 1

If you haven't already, talk with us about a suitable electronic cashbook system for your business such as Xero. Contact us now for a free trial and to speak to one of our Xero certified advisors about how to get the most out of Xero for your business.

Step 2

Start to develop your regular accounting procedures by separating your tasks by expected frequency as itemised below. General accounting tasks will fall into each category, and tax-related tasks typically come up no more than monthly.

Weekly and monthly tasks

These are typically bookkeeping chores and each business will differ in complexity depending on transaction volume. Generally all businesses should follow these steps.
  • Sort your mail into action piles
  • Process any new customer orders, record all sales transactions, and mail out any new accounts receivable invoices
  • Gather each day's cash and cheques, fill out a deposit slip and bank
  • Pay any invoices that are due or for which you can get an early payment discount
  • Record any withdrawal and deposit transactions in the electronic cashbook.
  • File records in a suitable filing system
  • Reconcile bank statements to electronic cashbook

Two monthly, quarterly or six monthly tasks

These tasks are GST, PAYE or Income Tax related; once the weekly and monthly tasks are adhered to the rest will follow in an orderly fashion. Please contact us to get advice on how to effectively organise this function in FY17.
At Alliott NZ looking after your tax is not just about helping you to pay less tax – although we do make sure you’re not paying too much. We’re here to help you with any aspect of tax from compliance to complex structures. Take your business to the next level with help from our experienced team of Chartered Accountants and Business Advisors. Phone us in Auckland on 09 520 9200.
 

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